Existing users, 
Buying an iPhone 3G online and non-activation penalties
Posted 12 June 2008 @ 1pm in News
Monday we reported that all new iPhones would have to be purchased and activated either at AT&T or Apple retail locations, eschewing the current iTunes activation strategy pioneered for the first generation iPhone that allowed customers to buy online.
However, in a recent interview with Reuters, AT&T representatives implied that this might not be the case. Quoting the story: "There would be penalties for users who do not activate the iPhone in the first 30 days, AT&T said, in a move aimed at reducing the number of customers who buy an iPhone and tweak it so that they can use it on another network." Additionally, Apple’s own UK press release confirms that, at least in the UK, would-be iPhone customers can indeed buy online. From the release: "iPhone 3G will be available in the UK through O2 and Carphone Warehouse. iPhone 3G will also be sold online through O2 and Carphone Warehouse."
First-generation iPhone customers were not permitted to use either cash or gift certificates to purchase iPhones, and were limited to 5 phones per individual buyer. Apple employed this strategy in an effort to hobble grey marketeers seeking to unlock and resell iPhones to consumers intent on using an alternate cellular service provider in an official market or bring iPhones into markets where Apple had no official presence at all.
Typically, the acquisition of a subsidized cell phone involves a contract which, if breached prior to the agreed upon timeframe, results in steep charges to the customer should they wish to keep the phone. In the case of buying an no-activated-but-still-subsidized iPhone over the Web, AT&T and Apple could simply include a checkbox during the order process indicating that the customer agrees to purchase one of the contracts offered by AT&T within 30 days (for example) then impose a financial penalty upon non-activation, or have their credit card charged a predetermined amount to cover the subsidy. Vodafone has offered a glimpse into what that amount might be by stating that they’ll be selling unsubsidized 8GB and 16GB iPhone 3G models for 499 and 599 euros, purportedly for prepaid plans.
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8 Comments
Posted by locattech
12 June 2008 @ 2pm
Is there any way to use the $100 credit that early iPhone adopters received towards the purchase of a new iPhone 3G?
Posted by yfrontdude
12 June 2008 @ 4pm
What i don’t understand is this: i thought all sim cards were trackable by the carrier… if so, can’t they just send a signal locking the phone that would have to be undone by an att or apple employee?
http://www.freeiphone3gtoday.info
Posted by kaykhanittha
12 June 2008 @ 9pm
Of course they can’t ! and what about privacy ?
http://www.iphone-3g-mobile.com/APPLE-IPHONE/How-to-buy-an-iPhone-3G-online-and-do-not-pay-penalties-for-non-activation
Posted by dmjossel
13 June 2008 @ 12am
Carriers can track their own SIM cards. Once you take out the AT&T sim and put in another, AT&T has no way to communicate with the device anymore.
That was why the previous iPhone used iTunes to control this process, by preventing the phone from being used except in the presence of proof of an AT&T account. This was eventually, of course, easily bypassed, which is why it is being replaced this time by in-store activation.
This is still missing the point, though. Subsidized/free handsets are for low revenue clients. It makes no sense on a smartphone. The secondary market has proven that people will pay anywhere from $600 to $1200 for an unlocked iPhone. Sell the current model for $600 and forget the activation and forget the sim lock and forget carrier exclusivity.
Apple has been selling well so far, but a fairly high portion of the phones they have been selling were eventually unlocked. Even despite the rollout of additional operators, sales might actually decrease now. I can (and did) buy an iPhone, and unlocked it for use on my unsupported carrier. My carrier still isn’t supported, and I’m not going to switch to get an iPhone. So no iPhone 2.0 for me, and I doubt I’m alone in that respect.
Apple should follow Palm’s lead here, and give the carriers exclusivity for a few months, then sell an unsubsidized, unlocked phone directly from the Apple Store. That’ll give them not only an attractive product for subscribers of their chosen carriers, but also a viable alternative for others willing to pay a premium for flexibility- and isn’t that what buying a “smart” phone is all about?
Posted by Vindobina
13 June 2008 @ 5am
What I’m still at a loss for is the answer to why? Why is Apple locking it all down to AT&T? I know (and have read) the multitude of explanations, both technical and fiscal, but somehow it still doesn’t make sense. With the amazing technology on this incredible device, everything from GPS locators, to time tracking software, what gives apple? IPhones for all I say!
Posted by chashulme_dotmac
13 June 2008 @ 4pm
I believe the reason is that Apple is still living with the original (exclusive) contract struck with AT&T to support the autonomous development of the iPhone. When that five years is expired, then I assume you’ll see major change.
Posted by 16ozBud
14 June 2008 @ 7pm
Dedicating such an elegant piece of technology to certain carriers is Communist. Its like walking into a convenience store in China where they have everything - but only one brand, or watching their nightly television - Every channel is state run CCTV.
Although I use Mac I refuse to buy anything brought into the marketplace via communist style barriers.
I will not buy an IPhone until it is an undedicated carrier phone.
Posted by arisr
15 June 2008 @ 4am
I love and use Apple products but got a Blackberry Pearl instead of an iPhone simply because I did not want to be manipulated into leaving Verizon whose service I’ve respected to join AT&T who I left years ago because of poor service. I got the Pearl for free with all the discounts but would have paid big bucks for an unrestricted iPhone, as I believe many would. Why not charge double price for an unrestricted phone and see how many people are willing to go with AT&T for $200-$300 in savings.